"Let us take the process of circulation in a form under which it presents itself as a simple and direct exchange of commodities. This is always the case when two owners of commodities buy from each other, and on the settling day the amounts mutually owing are equal and cancel each other. The money in this case is money of account and serves to express the value of the commodities by their prices, but is not, itself, in the shape of hard cash, confronted with them. So far as regards use-values, it is clear that both parties may gain some advantage. Both part with goods that, as use-values, are of no service to them, and receive others that they can make use of. And there may also be a further gain. A, who sells wine and buys corn, possibly produces more wine, with given labour-time, than farmer B could, and B on the other hand, more corn than wine-grower A could. A, therefore, may get, for the same exchange-value, more corn, and B more wine, than each would respectively get without any exchange by producing his own corn and wine. With reference, therefore, to use-value, there is good ground for saying that 'exchange is a transaction by which both sides gain.'" -- Karl Marx, Capital, Chapter 5: Contradictions in the General Formula of Capital.
The sheer volume of his work makes Karl Marx difficult to read. Here I concentrate on the three volumes of Capital. In the Progress Publishers edition, they consist of 867 pages, 551 pages, and 948 pages, respectively. Is there a one-semester class in which students are expected to read all of that? If I were a scholar, I suppose I would be required to learn German. I suppose one ought to also look at the secondary and tertiary literature, maybe from one's home country. (The fact that I can assume such literature exists, wherever you are coming from, attests to Marx's importance.)
Another difficulty is in understanding why Marx chose his order of exposition. The introduction to the Grundrisse is an important text on method here, although I gather Marx came to think of the order in the main text of the Grundrisse as backwards. As I understand it, Marx works from higher levels of abstraction to lower levels, with the concrete being overdetermined, in some sense. These levels are supposed to be real abstractions. Reality is not generated out of thought, as in Hegel. One might respond to the first objection here by saying that the distinction between fixed and circulating capital is a volume 2 issue and can be ignored in volume 1. The overall arc is to consider production in volume 1, circulation combined rather mechanically with production in volume 2, and then the unity of production and circulation in volume 3. The decomposition of surplus value into profits, interest on monetary loans, rent, wages for non-productive workers (such as clerks hired by banks or lawyers) cannot be fully explained until volume 3. And Marx never even gets to taxes and the state. But, according to Lenin, I do not understand Capital since I have never read Hegel's Logic, as one might expect of one who has read some of Bertrand Russell.
Capital is an immanent critique, and it is not always easy to be sure of Marx's attitude to what he is writing about. I think that Marx does not expect prices of production to be proportional to labor values, for example. He says as much in a footnote at the end of chapter 5 in volume 1. It does not help the reader that he does not explain this as fully as he ever will until towards the start of volume 3, more than a thousand pages later. The distinction between labor values and exchange values seems to be of no matter in much of the middle of volume 2, where he explains how the wear and tear of long-lived machinery, the value of ancillaries such as fuel to keep machinery running and to light a factory, and raw materials that actually appear changed in the product all contribute to a commodity's value.
I think a major difficulty some have is that a Marx is developing a systems view or structural approach, in some sense. I find many bourgeois commentators seem to object to the labor theory of value based on the feelings of those engaged in a single transaction or on a supposed analysis of a single market. This standpoint seems besides the point to me. When, in volume 1, Marx talks about the capitalist, he is treating the capitalist as "capital personified", and so on.
I think a major point of Marx is why so many have necessary illusions about capitalism. So many perceive human social powers as relationships inherent in objects, such as money capital goods, or land, or inherent in institutions such as markets. This confusion and fetishism by apologists, at a superstructural level, has a role in keeping capitalism going. Marx tries to explain such illusions created by markets.
An issue I have is with readings of Marx as presenting a scientific, positivistic theory of prices and distribution. Even if not fully in the spirit of Marx, I find empirical work with input-output tables of interest, though.
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I think that in order to understand the "Order" of Capital or the "Logic of Kapital" from Grundrisse or Contribution to the Critique of Political Economy one must read this Index of Contents.
https://www.marxists.org/reference/subject/economics/mill-james/index.htm
and compare it with this one.
https://www.marxists.org/archive/marx/works/1859/critique-pol-economy/
On april 5, 2009 you have given an overview of the various economic currents. Marxism is part of structuralism. But institutionalism (Veblen, and nowadays North) and actor-centred theories (theories at the micro or meso level) are equally important. It is essential not to get stuck in marxism, because it is merely a part of the picture and not the whole truth.
I've read John Stuart Mill's Principles, not his father's works. Both seem to present political economy in an order to which Marx objected.
I like Veblen. I still find discourse on the Internet about Marx quite intriguing.
«The sheer volume of his work makes Karl Marx difficult to read. [...] I still find discourse on the Internet about Marx quite intriguing.»
The volume as you note elsewhere is one of many factors: the terminology, the use of german, the immense background as in classical political economists and Hegel etc., and all this generates a situation described by J. K. Galbraith said in a quote that I only found today:
“It has been the acknowledged right of every Marxist scholar to read into Marx the particular meaning that he himself prefers and to treat all others with indignation.”
«The decomposition of surplus value into profits, interest on monetary loans, rent, wages for non-productive workers (such as clerks hired by banks or lawyers)»
That “non-productive workers” is a bit too strong, as they are as productive as a company's own accounting clerks. They certainly contribute to plus value, not to surplus value, even if indirectly.
«according to Lenin, I do not understand Capital since I have never read Hegel's Logic»
I have never even tried to read "Logic", it is famous for not being entirely accessible, to put it generously.
«I think that Marx does not expect prices of production to be proportional to labor values, for example. He says as much in a footnote at the end of chapter 5 in volume 1. [...] The distinction between labor values and exchange values»
But since his overall aim is to do cost accounting of the labor of free people working as employees, the issue of exchange values does not matter much, until the cost accounting id done and the issue if where surplus comes from arises.
But I reckon that overall Marx accepted the classical political economist notion that prices tend towards their embedded labor costs, except for surplus of course.
«Marx is developing a systems view or structural approach, in some sense. I find many bourgeois commentators seem to object to the labor theory of value based on the feelings of those engaged in a single transaction or on a supposed analysis of a single market.»
That also happens, but if you look at the "glorious" models of Walras, Marshall, and in particular their apotheosis into the Arrow-Debreu-Lucas models, they are too whole-system models, however horridly constrained hacks.
The real difference is the difference in the whole-system approach:
* K. Marx starts with view of the political economy as a complex machine, a giant factory, in which what matters is following the flow of production, and in particular how the labor of free employees accumulates during it,
* The neoclassicals start with a view of "The Economy" as a set of marketplaces, as a giant market square, in which what matters is looking at the mesh of trades and "tatonnement".
In a similar vein, the physiocrats started with a view of the political economy as a giant farm with some cottage manufactories.
An interesting and more recent view, mostly shared by H. Minsky and M. Pettis, is to start with a view of the modern financialized political economy as a set of interlocking balance sheets and of positions taken on them, and a balance sheet approach is quite useful.
«compare it with this one. https://www.marxists.org/archive/marx/works/1859/critique-pol-economy/»
Oh many thanks for the suggestion to compare, but I just had a funny moment on reading foot note 17 of the latter:
https://www.marxists.org/archive/marx/works/1859/critique-pol-economy/ch02_3.htm#17
“In Ch. 9, Book I of his Politics, Aristotle sets forth the two circuits of circulation C—M—C and M—C—M, which he calls "economics" and "Chrematistics", and their differences. The two forms are contrasted with each other by the Greek tragedians, especially Euripides.”
I have never noticed that reference to "chrematistics", and was totally ignorant of the term itself, so the obvious web search returns:
https://en.wikipedia.org/wiki/Chrematistics
“According to Aristotle, the "necessary" chrematistic economy is licit if the sale of goods is made directly between the producer and buyer at the right price; it does not generate a value-added product. By contrast, it is illicit if the producer purchases for resale to consumers for a higher price, generating added value.”
Those "value-added” and “added value” should be more properly "surplus value"; my view of K.m Marx as to this is that he aimed to prove that "surplus value" is the difference between the "value as labor of free employees" of the wage-goods they can buy with their -money-wages, and the "value as labor of free employees" of the labor-power they sell to their employer to get those wages.
The Wikipedia entry continues:
“In Karl Marx's Das Kapital, Marx developed a labor theory of value inspired by Aristotle's notions of exchange[6] and highlighting the consequences of what he also calls auri sacra fames (damned thirst for gold), a Latin reference of Virgil to the passion of money for money itself.”
K. Marx a latter-day tomist?
«I find many bourgeois commentators seem to object to the labor theory of value based on the feelings of those engaged in a single transaction or on a supposed analysis of a single market.»
Of course the real objection is to the conclusion that she share of plusvalue that goes to “profits, interest on monetary loans, rent”, that is sur-plusvalue is illegitimate because "value" is defined as "labor of free employees".
Their point of view is that "chrematistics", buy ("labor-power") low to sell ("labor" embedded in commodities) high, taking advantage of imperfect competition, is entirely the right thing to do, because "The Markets" are always right.
Side note: the crucial observation by J. M. Keynes that interest is the price of liquidity, not of money, can be used just just against the neoclassicals (Mills, Clark, Marshall) but also against Marx, because it is not an "economic good", and is not produced with the "labor of free employees". That "liquidity" as in Keynes is a very interesting concept indeed, because it is what creates path dependency with "capital" ("leets"/"putty" capital is perfectly liquid), I am sorry this rambling above as usual makes no sense :-).
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